The defendant foreign state moved to set aside a default judgment of approximately $250,000 arising from a wrongful dismissal claim by a long-term embassy employee.
The court applied the four‑part test for setting aside default judgments: promptness in bringing the motion, explanation for the default, existence of an arguable defence, and overall interests of justice.
Although the court found the defendant did not move promptly and provided a weak explanation for multiple administrative failures in handling the claim, it concluded there was an arguable defence concerning the length of the notice period, deduction of disability benefits, possible frustration of contract due to disability, and human rights damages.
Balancing the factors, the court held that justice favoured permitting the defence to be advanced.
The default judgment was set aside on strict terms, including payment of costs and payment of the judgment amount into court.